Everything you need to know about while preparing for Final CA Paper on Strategic Financial Management

In this article, we are sharing the tips & tricks on Preparing for Final CA Paper on Strategic Financial Management.

What is the structure of the CA Final SFM paper?

SFM at CA Final level is extremely concept-driven. Gaining a complete understanding of the concepts involved is the only key to crack the exam with decent marks. (The paper is roughly divided into 80% practical questions and 20% theory).

The ICAI paper is a 100 mark paper where the 1st question is a compulsory question of 20 marks followed by 4 out of 5 questions of 20 marks each that are to be solved.

What are the examiner’s expectations?

  1. Emphasis will be laid on conceptual clarity.
  2. The examiner will assess the ability of the student to understand the problem, usage of appropriate working notes and exercise of good judgement.
  3. The presentation of answers will be given weightage – avoid re-producing a fixed format-based answer and let the presentation flow logically.
  4. The assumptions made are reasonable and in line with ICAI.

What should be the source of content?

  1. Content provided by your Coaching Provider along with your personal study notes can be used as a base. However, ensure that it is comprehensive in its coverage by cross checking it with ICAI study material.
  2. Past Examination Papers, RTPs and MTPs.
  3. Once you are done covering your base syllabus, make sure you practice additional questions from other sources to ensure that you are hands-on with various patterns of questions.

Pro Tip: Stick to your base material as a reference. You must avoid changing the source of content closer to examination since that may lead to confusion in your study preparation.

What is the ideal learning methodology & time to be invested?

Reading Source Time Expected Outcome
1st A detailed study of every subject involved. 80 – 100 hours
  • Eliminate the easy questions and prepare a repository of questions that need to be practiced again
  • Prepare a handy book where all the formulae along with short explanations can be noted
2nd A summarized version of the syllabus. 45 – 50 hours
  • Cut down the list of questions to practice in this revision
  • Practice new sums to sharpen your ability to interpret new questions
  • Plan as to how you can comfortably revise during the exam days
3rd A mock revision to be prepared for the exam days. 25 – 30 hours
  • Practice all the important-marked sums, go through the theory topics and appear for a mock exam

Pro Tip: Ensure that you practice 20-25% of the questions in writing to enhance your conceptual clarity and to learn how present the answers appropriately.

What is the appropriate order in which the syllabus should be studied?

The overall portion can be divided into two major buckets. Studying your SFM syllabus as per these buckets will be useful in building conceptual clarity.

Valuation Based Topics (Approx. 35-40%) Other Topics
Security Valuation Foreign Exchange Exposure & Risk Management
Portfolio Management International Financial Management
Corporate Valuation Derivatives Analysis & Valuation
Mergers, Acquisitions & Corporate Restructuring Interest Rate Risk Management
Risk Management Mutual Funds
Security Analysis Securitization
Start-up Finance
Financial Policy & Corporate Strategy

Pro Tips:

    1. Generally, the internal break-up of each question is 8+8 (practical questions) +4 (theory). Hence, ensure that you cover the theory topics thoroughly.
    2. Cover theory topics simultaneously along with practical topics – students have a tendency to designate theory for the end, when it is eventually ignored.
    3. Prepare summaries of the theory topics for quicker revision.
    4. Refer to the Referencer developed by ICAI to prepare a summarized version of the notes.

How to prepare on the eve of the exam?

On day of FR Paper Break Day On the exam day
Practical Foreign Exchange Exposure & Risk Management International Financial Management
Derivatives Analysis & Valuation Interest Rate Risk Management
Mutual Funds Security Valuation
Portfolio Management
Corporate Valuation
Mergers, Acquisitions & Corporate Restructuring
Theory Risk Management Security Analysis Securitization
Start-up Finance
Financial Policy & Corporate Strategy

Pro Tip: A day before the exams, multiple readings of the important formulae should be done, and on the day of the exams, just a quick revision of the same with a calm mind should suffice.

What are the major challenges faced by students while attempting the Exam on the D Day & how should you prepare in advance to meet those challenges?

Challenge Solution
Inability to logically think and present an answer to a new question
  • Solve a few questions in writing in every revision
  • Focus on the format of the various answers as per ICAI
  • Know when to elaborate through working notes to improve understand-ability
Recollecting and associating questions to the related topics Appear for a mock exam so that you can get an idea of how to deal with all the topics together
Crunching the syllabus in the 1.5 days Prepare handy summaries and a repository of important questions
Scoring well in theory topics Use the right vocabulary – stick to the keywords used by ICAI
Inability to manage time in the paper Unnecessary time should not be devoted on a particular question. In case you cannot figure out the solution to a particular question, designate some time to it at the end of the paper
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